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assessed on the outstanding tax liability for each of the years.
Petitioner contends that he does not owe taxes for 1997
because his tax attorney improperly changed his method of
accounting from accrual to cash. Petitioner contends that if he
had remained on the accrual basis, he would not have a tax
liability for 1997.
Petitioner filed his 1997 Form 1040 and his Form 1040X using
the cash method. Petitioner did not challenge his tax liability
for 1997 in his OIC. At trial, petitioner contended that the
change in his method of accounting from an accrual to a cash
basis caused an overstatement of his income for 1997. Petitioner
claims he received a large settlement in a lawsuit that year that
related to “monies owed for the prior five years.” Petitioner
contends that if he had remained on the accrual basis, he would
not have included the entire settlement in income in 1997.
Petitioner provided no evidence to corroborate his testimony.
Assuming the facts to be as stated by petitioner, however, the
year of inclusion would not change. See sec. 1.451-1(a), Income
Tax Regs. (“Under an accrual method of accounting, income is
includible in gross income when all the events have occurred
which fix the right to receive such income and the amount thereof
can be determined with reasonable accuracy.”); see also Lark
Sales Co. v. Commissioner, 437 F.2d 1067, 1073 (7th Cir. 1970);
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